Fort Mac gets room for growth

EDMONTON— Another 22,000 hectares of land has opened up for the expansion of Fort McMurray under an agreement that prevents further oilsands development in the area by immediately cancelling leases.

Mayor Melissa Blake said the released land, which the municipality will have to purchase from the province on an as-needed basis over the next five to 15 years, will be enough to handle a population expected to double by 2030.

As of 2012, 76,000 people lived in Fort McMurray.

“For the first time in the history of this region, we will be able to confidently and adequately plan for our community’s future and we will be able to deliver it as well when it’s needed, not long after,” Blake said Thursday.

Until now, Fort McMurray couldn’t grow because the province owned the land surrounding it. After meetings with the Municipality of Wood Buffalo, lease holders, First Nations groups and the public, the province agreed to sell progressive chunks of the land for residential development. The new development area is more than twice the size of Fort McMurray, but with muskeg, river slopes and a buffer zone, not all can be developed.

The price will be based on fair market prices, Energy Minister Ken Hughes said.

Any price agreement must also take into consideration a new funding plan for infrastructure needs, to be hammered out by summer 2014, where roads, water and utility lines into new developments will be paid for by the municipality, the province and private developers.

Starting immediately, all subsurface leases and surface agreements on the 22,000 hectares to be developed are cancelled if they are incompatible with houses and businesses, Hughes said.

That includes leases held by 10 to 15 companies, including Value Creation Inc., whose leases cover a large portion of the land in the new urban development sub-region.

The company had plans to access bitumen reserves under the proposed urban zone, then return the reclaimed land to the city, complete with roads and sidewalks, in about one decade. “We are now assured there will be no development of industry on or under where future homes, businesses and people will be located,” Blake said. All companies with cancelled leases will be compensated based on the province’s Public Lands Act or Mineral Rights Compensation Regulation.

“This was no an easy set of decisions,” Hughes said. “Clearly this is a very small piece that is the oilsands in northeastern Alberta and clearly people need an urban community that they enjoy, that they want to live in, that they can really celebrate and that includes not having energy development going on right in that community. So these are balancing interests we were addressing and I think we’ve come up with a very fair approach to them.”

Rick Orman, an adviser for Value Creation Inc., said he’s pleased the city boundary has finally been determined after years of debate, giving companies more certainty.

“The government strung companies along for four years while they were spending money, not knowing that ultimately they were going to lose their leases,” said Orman, a former Alberta energy minister.

“To me, the biggest travesty is just being strung along for so long.”

Orman also questioned the need to make Fort McMurray two-thirds the size of Calgary.

“To me, they say they’re planning for growth to 180,000 people by 2030,” he said.

“It just seems like an excessive amount of land. I will never understand that, but I’m not the minister and not the mayor.”

Orman called the entire deal “rough justice” for the company.

“Now, what they’ve been told is that ‘I’m sorry, but you’re not getting the resource’ and that’s rough justice,” he said.

Binh Vu, interim CEO for Alberta Oilsands Inc., said his company is still determining what company leases are affected.

“We are continuing to monitor the situation to ensure that fair treatment is provided,” Vu said through email.

“The legislation provides for at a minimum — which is an important point to stress — a refunding of all costs to date on the land that is being cancelled,” he said.

“(Alberta Oilsands) has spent at least $50 million on Clearwater since 2007.”

Of 200 surface dispositions on the urban development plot, approximately 150 are standard ones for pipelines and power lines and roads and will be allowed to stay, the province said.